Smallholder Crop Insurance in East Africa: A New Way Forward

Smallholder farmers in East Africa are increasingly vulnerable to risks associated with changing weather patterns. Climate insecurity puts their livelihoods in jeopardy and discourages investment in new technologies. As recent studies have explored, viable business models for crop insurance have the game-changing potential to reduce risks for the 2 billion people that depend on smalholder farms for income and subsistence.

Despite the promise, attempts at developing crop insurance have been rife with complications. Pilot programs have failed to scale for a number of reasons, including: insufficient climate data, low uptake due to lack of affordability as well as poor product design, unfavorable policy environments, high operational costs, and lack of scientific research to determine risk. The few that show scalability, such as the R4 Rural Resilience Initiative in Ethiopia (R4) and ACRE in East Africa, have done so by building inclusive participatory processes with strong institutional partners and by integrating insurance into other risk reduction offerings, but they continue to face a number of challenges, especially with regards to data availability, high operati
onal costs for installing and maintaining independent weather stations, and independent risk assessment.

As an implementing partner with Tetra Tech ARD for USAID/Kenya and East Africa’s PREPARED Project, SSG has developed a comprehensive public-private partnership between Jubilee InsuranceEast Africa, Kenya Meteorological Department (KMD), Rabobank, UNFAO and others to design and launch an Index-Based Weather Insurance product referred to as “Kinga Kilimo” (“Protect Farming” in Kiswahili). The product is designed to provide ICT based Agro-weather advisory to farmers via SMS prior to climatic events to provide forecasts for land preparation, timing for planting, crop variety and cultivars, crop management (fertilizer, pesticide application, cultivation, water supplementing), postharvest management, and soil conservation. It also offers parametric Weather Based Index Insurance for risk management of crop production losses associated with extreme weather events.

Both the partnership and the product are intended to address the challenges and to incorporate lessons learned from the previous attempts at crop insurance. As such, PREPARED has designed the partnership around several critical innovations to maximize success in designing a crop insurance product:

Incorporate Weather Data: To overcome the limiting factors of data quality, the partnership provided capacity building to the Kenya Metrological Department (KMD) in order to produce a blended weather dataset that incorporates over 35 years of data. This dataset uses Potential Evapotranspiration (PET) and GeoCLIM – a geospatial climate data-management and analysis software tool that integrates observed station data with satellite-derived estimates – so as to address both ex-ante and ex-post risk faced by the farmer at farm level.

Few, if any, crop insurance schemes have had such a comprehensive investment in improving data collection. Mr. Francis Ngari, the Micro-Insurance Manager at Jubilee Insurance, explains the value-added from this approach, noting, “We see this shared value approach to partnership as a big breakthrough in designing crop insurance. Previously we have had challenges accessing climate data and engaging with the Kenya Meteorological Department in designing crop insurance products, however, this partnership has made this possible. Getting credible and more robust blended data from KMD has made our premiums lower and improved the credibility of our products.”

Improve the Service Provision of Government Partners:  Guided by SSG Partnership Specialist Polycarp Ngoje, the  PREPARED project has helped transform the culture of the Kenya Meteorological Department through PREPARED’s Quality Service Improvement Program (QSIP) to be service-oriented and to focus more on potential collaboration and partnership to enhance usage of weather data.

Peter Ambenje, Director of KMD, reflects on the importance of this shift in orientation, stating that “The innovative approach to the partnership design of the Weather Index Insurance Kinga Kilimo product has opened our eyes on how we can engage with the private sector and generate products that add value as opposed to just sharing climate data. The Quality Service Improvement Program (QSIP) has changed the approach and mindset of our staff as far as service delivery is concerned. We look forward to adopting this model in engaging with other partners moving forward.”

Mr. Ngari attests that this partnership is “a breakthrough in agriculture insurance.” The United Nations Food and Agricultural Organization (UNFAO), which has contract farming for legumes and pulses in Eastern Kenya, has also found this partnership approach useful to them for downscaled weather forecast and climatological zoning based on historical data and water requirement satisfaction indexing for various crops. According to Philip Mwangi in the program office in Machaon County, “the partnership has been the missing puzzle [piece] in the contract farming. The scientific tools and downscaled agro weather advisory tool is a great avenue to disseminate crop management information to the farmers from land preparation to post harvest management.”

The new product is being test-marketed in several counties in Kenya this fall with the goal of rolling it out across much of the country for the spring growing season. It is expected to reach over 15,000 smallholder farmers in these pilots alone. Perhaps more importantly, though, the lessons learned from this partnership – including the need to bring the right partners together, the importance of using proper climate data as a base, and the need for government agencies to understand shared value and service provision – could transform crop insurance across all of Africa.

Coming Together for Education in Haiti

by Andrea Alcala


On September 5th, public schools in Haiti opened up their doors to the new school year, and with a new school year comes the renewed opportunity to tackle educational gaps and challenges.

Haiti’s education system deficiencies have been magnified by past international and national assessments results that showed how almost half of primary school students are not able read or write in French nor Creole by grade 2. In response to this alerting information, on November 5th of 2014, the Haitian government adopted the National Cause: Reading, Writing and Math (CNLEM). The National Cause is a nationwide platform to advance the aforementioned skills in basic education through focalized and standardized efforts. As a way to bring back national awareness to the National Cause, the Ministry of National Education and Vocational Training (MENFP) in collaboration with the United States Agency for International Development (USAID) launched a Back-to-School Conference on the importance of reading, writing, and math in Port-au-Prince and Cap Haitien, Haiti.

SSG Advisors led the technical implementation and logistical coordination of these events, bringing together close to 200 participants per location. The event mobilized MENFP local and regional staff, as well as representatives of national and international partnering organizations committed to improve basic education in Haiti.

WP_20160915_002Conferences were divided into two main sections: presentations and discussion. The first part of the conference was structured with two key sessions covering the National Cause and the importance of literacy, numeracy, and mother tongue instruction, with national presenters such as the MENFP Director General-Mr. Louis Mary Cador and Matenwa non-profit, community leader Abnel Sauveur, and international presenters such as Dr. Josefina Vijil, Dr. Rosangela Bando, and Christine Low. Followed by the presentations were the small group breakout sessions to discuss personal and organizational resolutions to drive the National Cause for improving reading, writing, and math. This last part was highly appreciated by participants, as it not only offered them a space to voice their thoughts and learn from others, but it offered them the opportunity for their inputs to directly feed this national movement.

SSG Advisors is happy to see how the multi-stakeholder, collaborative nature of these efforts within the education sector remained true throughout the execution of these events and beyond. We look forward to learning about the shared advancements to achieve higher quality education in Haiti under the National Cause umbrella in the upcoming years.

 

Building Local Partnerships to Empower Youth in Kenya

I’m 35,000 feet above Greenland, and I’m thinking about Africa. Kenya, specifically. I spent six years growing up in Kenya in the 1970s and 80s, and so it is a place that remains clse to my heart, and it’s only been in the last ten years that I’ve realized how much those experiences havScreen Shot 2016-07-18 at 10.02.38 AMe shaped my world view and my career. I’m extremely lucky to be able to do the work I do for SSG Advisors, and to be able to give back – even in little ways– to a place that shaped so much of who I am.

Kenya is a country of contrasts: huge population growth and large swaths of empty space; arid land that is hard to farm, and lush, green valleys full of growth. Industries in decline – tourism, sugar farming – and new, growth sectors like minerals and technology. It has booming cities – Nairobi and Mombasa — with their frenetic construction, impenetrable traffic jams and vibrant populations; small towns on the verge of collapse, and sparsely populated rural areas. The country is governed by a Constitution that virtually every Kenyan believes in, but they struggle with daily small-scale corruption and ongoing political scandals. As always, Kenya represents the hope and de
speration of Africa.

I just completed, with three colleagues, a Rapid Partnership Appraisal (RPA) on the Kenya Youth Employment Skills (KYES) program, which aims to connect unemployed and underemployed youth with job opPicture2portunities in nine counties over the next five years. The program is funded by USAID, and is being implemented by the Research Triangle Institute International (RTI), our partner on the project. This kind of program can help reshape Kenya, a country with more than 60% of the population under the age of 25. Unemployment, while high among all under-educated youth, is even more prevalent among young women, who often become young mothers, or aren’t allowed to work due to religious or cultural reasons. A program like KYES can give hope to young people who lack confidence and skills, and don’t feel like they are part of the growing middle class. People who feel they are stuck doing low-level jobs with few skills or opportunities to move up the economic ladder.

Under this backdrop is where SSG Advisors does its best work. We believe strongly that partnerships between the private sector, non-governmental organizations, community groups and donors represent a critical part of the path forward in any program. The only way to make development really, truly sustainable is to work with the businesses and organizations that were built locally and will be in their communities long after the five-year span of any program. The great news is that many other organizations are also understanding this, including our partner NGOs, the donors and development banks, and of course the businesses with whom we are engaging. Our Sustainable, Transparent, Effective Partnership (STEP) process simply gives everyone a framework from which to work.

In the past 15 days, we met with more than 50 businesses and organizations in five counties across Kenya – from rural farming areas to the bustling cities. We learned about why growing indigenous chickens can yield faster profits than boiler chickens. We learned how ingredients like tea, sugar and bixa are grown and harvested (employing thousands of people) in the start of a long value chain that stretches around the world. We spoke with women’s groups who are selling handicrafts on the Internet in Europe and the US, and met home-grown technology companies that are designing products for Africans by Africans. We heard how a new government regulator is striving to provide better building standards to manage the construction boom. We met local political leaders who are trying to change their communities from the ground up. These people see hope in the future of Kenya, and are deeply invested in it. When we surveyed them about how long they planned to be working in the country, the answer was invariably “for a lifetime.”

The work we did in Kenya over the last few weeks is really just the start of a process that will last for the entirety of the five-year program, and well beyond. This is a marathon, not a sprint. We are actively working with the program team and the partners in every county to start the process of brokering the partnerships that will make KYES successful, and just as importantly, that will give youth the skills and the job opportunities they need to be successful.

At SSG, we don’t just talk about sustainability as a vague concept, or something to check a box in a work plan. It’s fundamental to the work we’ve done in more than 50 countries, and with countless businesses and organizations. It’s core to how we help organizations rethink new business models, allowing them to tap into new markets. By working together in deeply rooted local partnerships, we have some hope of changing the outcomes for millions of people around the world.

Research and Recommendations on Indicators for Agricultural Cooperatives

SSG is pleased to announce the publication of our research report to culminate the Cooperative Research Support Services activity, entitled “Indicators to Measure the Economic Sustainability and Patronage Value of Agricultural Cooperatives: Research and Recommendations” (please see the publication here).

USAID contracted SSG to propose and justify two indicators to measure the impact of assistance to agricultural cooperatives: one indicator for financial sustainability and one indicator for patronage value, or the benefit that individuals receive for being cooperative members. This task was particularly challenging due to the diversity of cooperative experiences across the globe, which makes it difficult to develop widely applicable definitions and metrics, and the limited administrative capacity of many of the agricultural cooperatives with which USAID works.

SSG employed a mixed method approach to identify, filter, test, and assess these indicators. This approach included extensive literature review, key informant interviews with agricultural cooperatives in Guatemala and Kenya as well as subject matter experts and USAID implementing partners in the U.S. and Europe, and survey of subject matter experts. In the absence of an industry standard for designing and testing indicators, SSG developed an indicator rating approach that helped filter through scores of indicators based on data gathered through stakeholder interviews.

Additionally, SSG assessed the indicators based on Participatory Monitoring & Evaluation (PM&E) principles, with a focus on the utility of the indicators to the agricultural cooperatives and the ability of target organizations themselves to collect, report on, and make use of the data. The PM&E lens is aimed at making the process of designing and utilizing indicators a form of building local capacity in the vein of USAID Forward, a strategy within which local organizations develop the ability to increasingly engage with the Agency as implementing partners. SSG’s approach has the potential to advance USAID Forward in that, based on our indicator recommendations, the cooperatives can feel invested in the design of the project and think critically about the effects of USAID assistance.

So, now what? There are several noteworthy next steps that arose from this research. First, during the final presentation to USAID, the report appeared to spark important conversation among the researchers and various USAID stakeholders around how to continue to strengthen the M&E and impact of assistance to agricultural cooperatives. Second, given the objectives of USAID Forward, it will be interesting to explore opportunities to incorporate PM&E principles into other types of activities where target organizations or individuals can assume ownership over the indicator development and reporting process. Third, there appears to be an ongoing opportunity to leverage information and communications technology to inform M&E around cooperative development and other USAID agriculture activities through self-reported data. This capability may be particularly important for indicators regarding small farmer perception of cooperative management, which may be costly or difficult to ascertain through face-to-face surveys due to sensitivities within cooperatives. We are looking forward to leveraging the methodologies and experiences from the Cooperative Research Support Services activity in the future, whether with cooperatives or other areas in which SSG has supported M&E for foreign assistance, such as the security sector.

Generating Partnership Ideas to Create Jobs in Bosnia and Herzegovina

SSG is increasing the capacity of municipalities in Bosnia and Herzegovina to harness private sector resources for local economic development through public-private partnerships, as part of the USAID Sida Growth-Oriented Local Development (GOLD) project.

SSG kicked off the project’s partnership identification process during a series of workshops for municipal economic development professionals that generated more than 150 partnership ideas, from geothermal exploration to underground garages. The GOLD team is now screening partnership concepts based on two types of decision factors:

  1. Impact – To what extent will the partnership create jobs and spur investment, sales, and exports? How aligned are the partnership outcomes with the core interests of prospective private sector partners?
  2. Feasibility – Is the partnership appropriate and likely to succeed given the resource constraints of the municipality, the GOLD project, and prospective private sector partners?

This month SSG will finalize concept documents for partnerships that the GOLD project team and municipalities would like to pursue. These documents will describe accomplishments to date and issues to consider during the partnership formalization process.

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Building Inclusive Markets in Clean Energy: How PFAN Matches SMEs to Capital in Asia

The path to developing a bankable clean energy SME (small and medium enterprise) in Asia is a long and arduous road that often times requires multiple capital infusions along the way. Unfortunately, external sources of capital for early stage endeavors have become increasingly scarce and difficult to access, leaving entrepreneurs limited resources to complete feasibility, proof-of-concept(s), and other early-stage activities necessary to attract external investors. Public Private Partnerships such as the Private Financing Advisory Network (PFAN) attempt to address this issue by providing these early-stage businesses and projects varying forms of technical assistance (i.e. professional services such as financial advisory, strategic consulting, etc.) that augment SME resources and capabilities during this early stage of development and, in turn, improve their ability to navigate early-stage development and successfully raise external sources of capital. Since late 2013, SSG has been working on the USAID-funded PFAN-Asia project, which has the ambitious goal of mobilizing $1 billion in capital for clean energy SMEs across the region.

Across the Asia region, PFAN’s portfolio spans a wide array of businesses: from end-user focused retail startups focused on waste-to-energy and solar home installations to more ordinary energy producing assets such as biomass power plants and wind farms, the companies we work with represent an eclectic mix of entrepreneurs and innovative ideas from across the region. Within the portfolio, we can broadly divide companies into two major categories of financial approaches: those who are seeking to raise project finance, and everyone else. This simple categorization helps us orient entrepreneurs to the general characteristics of the capital they are seeking, captured in the table below:

PFAN table 1

Along each of these financial approaches, PFAN plays an important role in assisting SMEs with navigating and engaging with the various players in the financial ecosystem – primarily through mentoring and match-making. PFAN does this by understanding the sources of capital and when it is appropriate to access them.

While there are many potential sources of capital (e.g. banks, PE funds, and DFIs), in general, there are very limited options during early stages of development where the risk is the highest, and capital is constrained to equity from informal sources such as friends and family. As the business or project matures, risk typically decreases inversely, and additional options begin to emerge that were previously inaccessible, including debt. In the context of New Venture Finance, this means that it is highly unlikely that a clean energy SME will be able to secure a loan from a commercial bank for early stage, proof-of-concept product development. What follows is an example of how access to capital evolves with increasing maturity for a typical New Venture Finance company; an analogous chart for Project Finance would look very differently across the board.

PFAN table 2

It is important to note that even though many investors might evaluate opportunities along similar fundamentals (i.e. management capacity, maturity, competitive positioning, exit opportunities, and ROI), the degree to which each plays in shaping a particular opportunity’s attractiveness will vary widely based on their individual allocation strategies.

The growth potential for clean energy in Asia is simply enormous, but unless they can access capital SMEs in the region will struggle to access this opportunity. By helping promising clean energy SMEs better understand how investors evaluate opportunities and by connecting them to the right sources of capital, PFAN strengthens the ability of small companies to seize the clean energy opportunity by sourcing the right capital at the right time.

Using Mobile Technology for Marine Biodiversity Conservation

As Secretary of State John Kerry implores world leaders to focus attention on the plight of the world’s oceans, a unique partnership on a remote island in the Philippines is demonstrating the power of public-private collaboration in preserving marine habitats.

Tawi-Tawi is a distant island in the Philippines archipelago, not far from Malaysia. The waters surrounding the island are pristine and rich with marine life. This rich natural resource is under increasing threat as illegal fishing and smuggling are on the rise due to the rapidly growing demand for fresh seafood across southeast Asia and beyond. “Dynamite and cyanide fishing are rampant,” says Tawi-Tawi’s governor. These illegal practices destroy delicate marine ecosystems, threatening the livelihoods of the island’s fishing communities.

Thanks to a new partnership between USAID/Philippines, mobile operator SMART, and the local government in Tawi-Tawi, that situation may be about to change. The 700-DALOY partnership is designed to provide community fisherfolk, enforcement agencies, and local governments with a new tool to report illegal fishing activity and expedite enforcement. SSG facilitated this partnership in support of the USAID ECOFISH project.

Through the partnership, SMART is creating an SMS-based platform that allows fisherfolk to report violations. Violations are captured in a database, processed and passed on immediately to local authorities, enabling a much more rapid and coordinated enforcement response. In addition, the data will allow the government to analyze violation patterns, strengthening prevention efforts. The ECOFISH project is working with fisherfolk, LGUs, and SMART to deploy the system in Tawi-Tawi. 700-DALOY will empower fishing communities to be partners with local governments and enforcement agencies in preventing the destruction of marine habitat. If this initial pilot is successful, the plan is to roll out the system nationwide in 2015.

According to ECOFISH project Chief of Party Gerry Sylvestre, “You can have all the good ordinance, all the good programs, but if we cannot implement them, then we are in trouble.”

By leveraging a proven technology, such as SMS, with a concerted effort to build the capacity of local stakeholders, the 700-DALOY partnership is providing the people of Tawi-Tawi with a powerful new mobile technology tool to strengthen coastal enforcement and preserve the island’s rich natural heritage.

Fishackathon Competition for Sustainable Fishing

Fishackathon

For many of the world’s coastal communities, fisheries remain essential to overall economic livelihoods, in particular for small-scale fisherfolk and their families who depend on daily catches for overall food security. Worldwide, small-scale and artisanal fisherfolk catch half of the fish consumed by humans. At the same time, growing populations and excessive fishing have led to smaller average fish sizes, shifts in species, steep declines in fish abundance of valuable species, and lower catches/lower incomes for fishers. In the coming decades these threats will be buttressed by climate change and the rise in ocean acid levels – anomalous variations that will erode the fish habitat function of coral reefs and related ecosystems.

Playing a part to meet these challenges, SSG and the ECOFISH Project in the Philippines joined forces with the US Department of State and the GSM Foundation’s collaborative initiative – mFish: Empowering the Sustainable Fishery Ecosystem – to seek technological solutions, in particular innovative coding and applications, for sustainable fishing. This month SSG/ECOFISH participated in a multi-day “Fishackathon” competition held simultaneously in multiple cities throughout the US in which developers and coders worked continuously to design applications and technology tools to address specific challenges. The ECOFISH Project prepared a challenge designed to improve the quality and effectiveness of catch data measurement. In the Philippines currently, government officials and scientists struggle with antiquated systems to measure the number, type, and quality of fish being pulled out of the ocean. These catch data are essential in understanding declines or improvements in fisheries.

Coming together on Friday, June 13th in New York City, Silicon Valley, Boston, and other locales, hundreds of developers worked continuously through the weekend of June 14th to design innovative technology prototypes to address the ECOFISH challenge, along with other management problems provided by other researchers and fisheries experts throughout the world. US Secretary of State John Kerry was to announce a number of winning solutions several days later at the US Department of State Oceans Conference held in Washington, DC. Winning developers would receive a range of prizes, including cash and a sponsored trip to the Philippines.

As recognized by the US Department of State and the ECOFISH Project, the grand challenges facing fisheries management must be met through the application of technological solutions. The Fishackathon represented a bold step to leverage technological innovation and the information and communications technology sector to bolster the sustainability of fisheries crucial for human development.

Fishackathon

SSG Awarded USAID Public-Private Partnerships Program

SSG Advisors is pleased to announce that we have been awarded the Partnership Services Program (PSP), a global IQC out of the USAID/Center for Transformational Partnerships Global Partnership Team (CTP/GP). The Center is part of USAID’s new Global Development Lab –a new entity that seeks to increase the application of science, technology, innovation, and partnerships to achieve, sustain, and extend the Agency’s development impact to help hundreds of millions of people lift themselves out of extreme poverty.

SSG began working with the Global Partnerships team in 2005. Since 2007, SSG has provided training, analytical services, and partnership building support under the GDA Support IQC. Under the new PSP, SSG will provide partnership support services to USAID Missions and offices, facilitate corporate engagement, foster thought leadership, and deliver partnership training and capacity building.

Says SSG’s President Nazgul Abdrazakova, “It’s an exciting time to be engaging with USAID as it launches the new Global Development Lab, which will be at the forefront of innovative public-private collaboration. We look forward to supporting USAID’s leadership in public-private partnerships and private sector engagement.”

SSG Sheds Light on Municipal PPP Opportunities to Improve Economic Outlook in Bosnia & Herzegovina

Bosnia and Herzegovina (BiH) still feels the effects of war twenty years ago, especially economically. Today unemployment is at 44 percent and youth unemployment is the highest in the world, at 63 percent.

Public-private partnerships (PPPs) have enormous potential to help meet these economic challenges. Through PPPs, municipalities in BiH can leverage their local resources to attract private partners able to invest in and contribute to sustainable local economic development—combining public and private financial, human, management, and technical capabilities toward shared goals.

Last month, SSG trained project and municipal staff to identify and shape sustainable, transparent and effective partnerships that will spur local economic development in BiH through the Growth-Oriented Local Development (GOLD) project. GOLD is a 5-year initiative led funded by USAID and Sida that centers on promoting investment, jobs, exports, and sales in 48 municipalities in BiH. Through the GOLD Project, SSG is helping open eyes to the promise of PPPs in BiH.

SSG has identified a number of interesting partnership opportunities around geothermal clusters, industrial park development, industry-led workforce development, strategic value chain development, recycling and waste management, and infrastructure development and management, such as irrigation systems.

Why haven’t public-private partnerships already gained momentum across BiH? Initially, many in both the public and private sector point to challenges in the legal and regulatory framework. But a closer look suggests that the paucity of partnerships is more rooted in a lack of a partnership mindset, mistrust between the public and private sectors, and a dearth of knowledge about how to identify and structure effective partnerships. Many also only consider contractual PPPs that must go through formal procurement processes and fail to recognize opportunities for development partnerships that leverage public and private resources to achieve common objectives without legally binding agreements.

Over the coming months, SSG will continue to work with the GOLD team and municipalities to promote the concept of partnerships, share tools to achieve local economic development objectives, and help structure these partnerships—resulting in new, higher paying jobs, new investment, and new sales and export revenue in communities across BiH.

BiH